The International Monetary Fund (IMF) has reduced its forecast for Nigeria’s economic growth in 2024 to 3.1 percent.
This revision is highlighted in the newly released “July 2024 World Economic Outlook” report, published on Tuesday.
The IMF attributed the downgrade to weaker growth observed in the first quarter of 2024. The new forecast represents a 0.2 percentage point reduction from the earlier projection of 3.3 percent.
This adjustment follows the lower-than-expected Gross Domestic Product (GDP) growth recorded in Q1’24. Despite this, the IMF has maintained its 3.0 percent growth forecast for Nigeria in 2025.
Data from the National Bureau of Statistics (NBS) revealed that Nigeria’s GDP growth decreased on a quarter-on-quarter basis to 2.98 percent in Q1’24 from 3.46 percent in Q4’23.
In light of the lowered forecast for Nigeria, the IMF also adjusted its projection for Sub-Saharan Africa’s economic growth in 2024 to 3.7 percent, down from the previous forecast of 3.8 percent. However, it raised the region’s 2025 growth forecast to 4.1 percent from 4.0 percent.
“The forecast for growth in sub-Saharan Africa is revised downward, mainly due to a 0.2 percentage point downward revision to Nigeria’s growth outlook amid weaker than expected activity in the first quarter of this year,” the IMF stated.
Globally, the IMF retained its growth forecasts of 3.2 percent for 2024 and 3.3 percent for 2025. The IMF noted that “the global economy is projected to grow in line with the April 2024 World Economic Outlook forecast.”
The report highlighted varied economic momentum, with service price inflation complicating monetary policy normalization and increasing risks of prolonged higher interest rates amid escalating trade tensions and policy uncertainties.
This development coincides with Nigeria’s inflation rate reaching a new high, hitting 34.19 percent in June 2024, according to the latest NBS data. This marks an increase of 0.24 percent from May 2024.
“In June 2024, the headline inflation rate increased to 34.19 percent from 33.95 percent in May 2024. This represents an increase of 0.24 percentage points,” the NBS reported in its Consumer Price Index (CPI) release on Monday.
Year-on-year, the headline inflation rate in June 2024 was 11.40 percentage points higher compared to June 2023, which was 22.79 percent. On a month-on-month basis, the headline inflation rate in June 2024 was 2.31 percent, 0.17 percent higher than the rate recorded in May 2024.
“This indicates that in June 2024, the rate of increase in the average price level was higher than in May 2024,” the NBS noted.
